The LG set-top, which will be released later this year, allows viewers to stream movies from the Netflix Web site to the TV set. They can already view them on PCs

Netflix claims more than 7 million members to its service, which boasts more than 90,000 movie titles and over 6,000 TV episodes.

"Internet to the TV is a huge opportunity," Netflix chairman Reed Hastings said in announcing the deal. Hastings added that the company considered developing its own branded set-top but "concluded that familiar consumer-electronics devices from industry leaders like LG Electronics are a better consumer solution for getting the Internet to the TV."

The pair will join others in the direct-to-TV space, including early-adopter Akimbo.